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Hutchison JV to bid for India mobile licence

Hong Kong-listed phones firm Hutchison Whampoa Ltd and India's Essar group will form a new joint venture company to bid for a fourth cellular licence the Indian government is offering, a newspaper reported on Tuesday.

Indian financial services group Kotak Mahindra is expected to hold a minority stake in the firm, the daily said, quoting unnamed sources.

Hutchison Whampoa is expected to have a 49 per cent stake in the new firm, the maximum that government regulations allow an overseas firm to hold in a telecom services company, the report said.

The investments will be made by two Mauritius-based investment arms of Hutchison Whampoa, it added.

The Essar group and Kotak Mahindra will together hold 51 percent in the firm.

Hutchision and Essar are already partners in a company that offers mobile phone services in Delhi.

A company official at Bombay-based Hutchison Max Telecom confirmed the move but said the holding structure had not been finalised.

India's mobile market is made up of 21 circles or zones. Each has two operators while state-owned telecom giants Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd are the third operators.

The country's department of telecom is now offering a fourth licence in each of the circles and flagged off bidding in March. It expects to award licences by the end of August. India had 3.703 million mobile phone subscribers at the end of April. The bidders have to be companies registered in India and must not have more than 49 per cent in foreign equity.

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